Operator: Good morning, and welcome to The Mosaic Company's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] And now I'll turn it over to Mr. Paul Massoud. Please go ahead.

Paul Massoud: Thank you, and welcome to our second quarter 2026 earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer; Luciano Siani Pires, Executive Vice President and Chief Financial Officer will review financial results. We will then welcome Jenny Wang, Executive Vice President, Commercial, to join Bruce and Luciano as we open the floor for questions. We will be making forward-looking statements during this conference call. Statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published this morning and in our reports filed with the Securities and Exchange Commission. Please note, in today's presentation and in our press release and performance data, we will refer to and provide various financial measures, including adjusted EBITDA, adjusted earnings per share, free cash flow, cost per tonne and adjusted effective tax rate, either on a total company or segment basis. Unless we specifically state otherwise, statements regarding these measures refer to our adjusted non-GAAP financial measures. Reconciliations of these measures to our most directly comparable GAAP financial measures can be found in our earnings release. Now I'd like to turn the call over to Bruce.

Bruce Bodine: Good morning. Thank you for joining our call. Our message for you today is simple. Mosaic is working through a difficult market by successfully managing what is under our control and positioning ourselves for an eventual recovery. Sulfur affordability and availability remain key drivers, but we know the situation will improve. We've curtailed production, and we're relying on our strong balance sheet as a bridge to a more sustainable environment. Here are some key examples from the quarter. We further curtailed phosphate production and minimized our purchases of high-cost raw materials. We've locked in a significant portion of our third quarter sulfur supply at reasonable prices that, while historically elevated, are still well below the current spot market. Across our business, we're aggressively managing our costs, which you can see in SG&A. These are real savings that we expect to be permanent. We fortified our liquidity by terming out short-term debt. If this environment persists, we have full access to our untapped $2.5 billion revolver. And we've addressed all of these near-term issues without sacrificing our long-term goals. We're reallocating underperforming capital away from non-core assets to support future opportunities. We continue to explore strategic opportunities for certain assets, including Araxa and Patrocinio while investing in new areas like our fast-growing and resilient Mosaic Biosciences business. Before I get into our business performance, let's address the sulfur situation in our markets. The ongoing Strait of Hormuz closure and the more recent Kazakhstan blockade continue to impact the global flow of sulfur and spot prices remain unsustainably high. We have curtailed production in the U.S. and Brazil simply because phosphate industry economics cannot accommodate current sulfur prices. That said, Mosaic is in a better position to weather the storm than most of our competitors are. Our long-standing relationships with Gulf Coast refiners and other global suppliers give us reliable access to sulfur. In fact, we were recently able to negotiate third quarter U.S. sulfur supply at a price that is considerably below the spot market. We are producing to meet as much demand as possible while trying to preserve margins and avoid high-cost inventory building. The sulfur situation is more than just an inconvenience for our industry. We believe global phosphate production will fall well short of last year by up to 30 million tonnes. With last year's low application rates, especially in the U.S. and limited fertilizer availability this year, crop yields will suffer, which could lead to food security challenges around the world in the near term. We are already seeing evidence of challenges. In Brazil, for example, despite significant acreage expansion, total crop production forecasts for the year have not kept up, suggesting significant yield impacts. Another season of under application will only exacerbate the problem. Only recently have crop prices begun to acknowledge the reality of production challenges around the world. In the past month, major ag commodity prices have moved up, providing some relief from high input costs for the world's farmers. The outlook for farm incomes is improving, which should be a catalyst for fertilizer demand. We're seeing early signs of this in Brazil. While shipments remain below historical levels as a result of ongoing credit issues, over the past several weeks, fertilizer shipments to Brazil have been very strong as growers respond to improved crop pricing. We expect phosphate prices to remain at current levels with sulfur-driven supply challenges as well as severely reduced Chinese exports, availability is likely to remain limited in many parts of the world. As we expected, the temporary suspension of the U.S. countervailing duties on phosphate imports from Morocco has not yet had an impact on NOLA prices. Phosphate prices remain higher in other key regions of the world and producers can realize higher netbacks selling in markets outside the U.S. So there is little incentive for producers to send fertilizer to the U.S. In addition, as part of the ongoing sunset review, the U.S. Department of Commerce has determined that the illegal subsidies that led to the duties in the first place remain in place in both Russia and Morocco. And the U.S. Court of International Trade recently reaffirmed the International Trade Commission's determination that the subsidies cause injury in the U.S. market. We are confident that the duties should continue once the suspension ends. While phosphate and sulfur markets are quite volatile, the potash supply and demand picture is much more balanced with product moving freely around the world and global supply meeting strong demand in all major potash-consuming regions. In fact, our summer fill program was fully subscribed. Strong palm oil economics and inventory replenishment in China bode well for ongoing good potash demand. Overall, we expect the potash market to remain constructive through this year. And longer term, we continue to believe that announced potash capacity expansions will be absorbed by steadily growing demand. Let's move on to our business, which is performing well, all things considered. Our global market access remains an important advantage. During the second quarter, we produced and sold 1.4 million tonnes of phosphate despite all the turmoil in the market. We were able to achieve these numbers because we have strong customer relationships across key agricultural markets, and we optimize our product mix to meet shifting demand. In addition, our ability to flex production and manage through the cycle is supported by the extensive work we completed over the past 18 months to fortify our assets. We're prepared to ramp back up to full production rates when market and raw material conditions improve. Potash remains a steady earnings and cash flow contributor and our recent investments, including the HydroFloat project at Esterhazy will provide meaningful benefits. In Brazil, where we have curtailed all phosphate production, except for high-margin products due to sulfur availability, our business continues to perform well. Given the overall market conditions, our $60 million of EBITDA for the quarter highlights the resilience of our Fertilizantes franchise. Capital allocation remains an important pillar of our strategy, and we continue to make good progress. We closed the Carlsbad sale. We're optimizing our Brazil portfolio with the advancing process to divest our Araxa complex, and we're allocating capital in pursuit of promising growth opportunities. The Rainbow Rare Earth Elements project in Brazil continues to show good potential, and our Mosaic Biosciences business is on track to double its revenues once again this year. I want to note that Biosciences growth is strong despite current farm economics, a clear indicator that growers are finding real value in our proven products. To summarize, we are attacking a difficult market situation by doing all we can to keep the company strong and preserve our ability to benefit from improving markets. Now over to Luciano for more detail on our financials.

Luciano Pires: Thank you, Bruce. If there is one takeaway for investors regarding our financials, it's that we are effectively managing factors under our control as we wait for a more sustainable market environment. In Phosphates and Fertilizantes, our operating costs were impacted by reduced absorption due to curtailed volumes. We're now doing 2 things simultaneously. First, we're aggressively removing fixed costs where we can, especially in Brazil to better cope with the temporary curtailments and to enable us to come back leaner when we restart. Second, we're maintaining our focus on asset health so that we can return to full production rates when the time is right. In the near term, however, ongoing curtailments are expected to result in limited fixed cost absorption and elevated idle expenses in Phosphates and in Fertilizantes in the third quarter, but this is temporary and does not represent what this business is capable of in normal operating conditions. In our U.S. Phosphate business, we've shown an ability to manage our input costs. In quarter 2, our raw materials costs averaged $522 per long ton for sulfur and $621 per tonne for ammonia, resulting in an average realized stripping margin of $422 per tonne. For quarter 3, as Bruce discussed, we settled a sulfur contract at $705 per ton. While much of this new contract price will be reflected in fourth quarter sales, we do expect some impact later in the third quarter. Given the dynamic nature of the market, we have chosen to once again provide some guidance for near-term raw materials costs. Therefore, for the third quarter, we expect realized sulfur costs of approximately $700 to $710 per ton and ammonia costs of approximately $610 to $620 per tonne. Combining this with our DAP FOB pricing guidance of $820 to $840 per tonne yields an implied realized stripping margin well above historical averages, which is a good result. In Potash, we successfully completed Esterhazy's annual turnaround during the second quarter. Looking ahead, the segment should see lower unit costs, especially with the additional volumes from Esterhazy's HydroFloat project. Second quarter MOP costs of $84 per tonne reflected a production mix that was more heavily weighted towards Colonsay volumes, but we expect to revert lower in the second half of the year. To offset some of the second quarter's curtailment impacts, we've become more aggressive in our review of corporate spending. You can see in our results that we've brought SG&A costs down by 20% year-over-year despite persistent inflation. Increased spending discipline, reduced support labor costs, lower bad debt expenses and benefits from recent divestitures are driving these savings. In the second half of the year, we expect SG&A to decline further as more of these savings are realized. From a cash flow perspective, we're starting to see the results of our actions. Mosaic's cash flow from operations improved through the first half of the year, and it is expected to rise further in the third quarter as working capital is released, mostly in Brazil and as additional cost reductions are realized. These are expected to more than offset any impact from higher raw materials costs. Combined with our lower CapEx expectation for the year of $1.2 billion, down from $1.25 billion, we expect sequential improvements in free cash flow in the third and in the fourth quarters. Our strong balance sheet continues to provide us with the flexibility to manage through this environment. In the second quarter, we put in place a $1 billion term loan to replace and extend very short-term commercial paper maturities. We refinanced $500 million of our commercial paper in June and the rest was done in July. We have a very comfortable short-term liquidity position. We have not tapped our revolver at all, and we will continue to evaluate opportunities to optimize our balance sheet. On the capital reallocation front, we continue to evaluate opportunities to optimize our portfolio and reallocate capital. We're advancing the process around Araxa, and we are progressing several opportunities involving our landholdings. To close, we've taken decisive actions and executed well as we work through the sulfur situation. The steps we have taken, first, across our operations; second, in our cost structure; third, in our capital spending; and fourth, in our balance sheet have all positioned us well for an ultimate recovery as market conditions normalize. And with that, I'll turn the call back to the operator for Q&A.

Operator: [Operator Instructions] And the first question for today will come from Duffy Fischer with Goldman Sachs.

Patrick Fischer: Question is just really around consumption in the Americas. So we know that last fall, we didn't put down -- and I saw on phosphate that we shorted the market on phosphate. Speculation is we did the same thing in the first half. So for this crop year, what's your best estimate for how much below normal phosphate application was for North America? And then a similar question, although it's looking forward, what do you think will be the application of phosphate in Latin America relative to normal?

Bruce Bodine: Duffy, thanks for the question. You're right. We did see, as you said, application in North America down on phosphate last year. We're seeing the same thing this year. I'll turn it over to Jenny to give more details, but we also expect declines in Brazil and Latin America as well, mostly driven by Brazil. So let me turn it over to Jenny to give you details.

Jenny Wang: Sure. So as you said, Duffy, last year, we believe North America phosphate application was down close to 15% versus the normal year. And this year, we are forecasting this application rate to further cut by around 20%. So if you compare with the normal typical phosphate application in North America, we're talking about over 30% phosphate down this year in '27. This is a combination of farm economic challenges, affordability issues but also it's an availability issue. So over to Latin America, especially in Brazil, last year, phosphate application didn't really go down. So that was normal last year. We actually saw some growth in Brazil last year. However, this year, we are forecasting similar percentage of the phosphate application down in Brazil by 30% at nutrient level. And this is likely going to be applied in the rest of the Latin America market. In fact, this under application of phosphate are going to have profound impact to the yield -- specifically for North America and Brazil, by looking at what has been applied to the field and also what has been the yield over the last 2 years, we are seeing additional phosphate removal from the field in Brazil could be up to 1.3 million tonnes of DAP equivalent, for that number in North America, in the U.S., that's 1.4 million tonnes additional removal of the nutrient. So as you can imagine, with this additional removal of phosphorus from the soil, that will have impact to the yield. And specifically, we have started to see yield impact in some of the major states in Brazil for the last crops. We see despite increased harvest areas, but the yield actually came down. That was evident in terms of the yield impact from this under application of phosphorus. U.S. market, we may see the impact this year, which can be even more evident with the weather event.

Operator: Your next question will come from Joel Jackson with BMO.

Joel Jackson: I'm trying to understand a bit about some of your guidance around phosphate in Q3. It's the ammonia cost you gave of $610 to $620 a tonne. It seems surprising considering I imagine that these run rates you're running at really just tonnes, cost and cost plus. I just want to ask about what's going on there? And second part of the question would be, does this sort of imply that phosphate earnings are lower in Q3 by a little bit, a lot. So can you just give us color about Q3 phosphate earnings, all the things you're talking about and what that implies like relatively versus Q2 earnings?

Bruce Bodine: Yes, Joel, thanks for the question. We did -- as Luciano pointed out, ammonia will go up a little bit. Part of that is due to the flow-through of inventory of the contracts that were settled in June and July. So June, July, August came down, we'll see that actually flow through COGS in quarter 4 on the ammonia side. But to your point, a mix just because of lower production is going to be more heavily weighted towards those contract negotiations and our own internal production. So we're going to see a peak of that in Q3, which does kind of hurt stripping margins a little bit as well as the ammonia that Luciano talked about. But I would use those as factors as you're looking towards guidance. The other factors to think about are cost absorption for the additional production down in North America. Quarter 2 didn't represent all of those curtailments. Quarter 3, given that those curtailments are likely to be sustained barring some unforeseen circumstance in the market, we'll have to absorb more of that. So that will affect some of our conversion costs on the margin as well. So expect stripping margins to be down, but still the good news is well above kind of historic levels. So we're feeling good about where they are, even though there are some headwinds, we should start to see some tailwinds on pricing. As Jenny alluded to on yield impacts, we're starting to see crop -- ag commodity prices respond in a favorable level, which should raise the affordability piece on the farm side, which really is another constraint that may not be seen because of supply constraint. But that demand constraint definitely is out there if supply were to come back. Luciano, I don't know if you want to add anything?

Luciano Pires: And again, because we're guiding for sales between 1.1 million tonnes to 1.4 million tonnes compared to this quarter, 1.4 million tonnes, again, depending on how the market goes, there could be a little bit of downside in volumes as well.

Operator: The next question will come from Vincent Andrews with Morgan Stanley.

Vincent Andrews: My recollection is that you were previously expecting about a $400 million outflow of working capital through the course of the year. Is that still a good number to work with? Or do you think it will be more or less based on what you know today?

Bruce Bodine: Yes, Vincent, I think we've said $300 million to $500 million so $400 million is, yes, the midpoint of that kind of range. We do still expect that type of liberation. We saw some of that in Phosphate in the first half, but the bigger one that we've been pointing to comes often many times in this time of year historically is the liberation of working capital in Brazil. But we actually see that being more acute this year because our B2B business, our production is down. So you actually see more liberation. But Luciano has some details on that. I'll let him talk about it.

Luciano Pires: Okay. Vincent, so bear with me, this is going to be a little longer answer. So in Q1, we actually were kind of flat in working capital compared to a big investment the year prior. So that was a result of the destocking of phosphate inventories. In Q2, we actually increased inventories again by $200 million, but mostly in Brazil. And we actually collected a lot of the sales from the Q1 excess inventory that we discharge in Phosphates. So therefore, the working capital kind of situation in Q2 was negative, but not by a large amount. Again, which is -- if you compare it to prior year, it's a little better given the quarter we're talking about because of these collections from Q1. What really disappointed in Q2 were actually the prepayments in Brazil. If you look a year back, there was -- if you look in the cash flow statement, there was a very strong cash inflow from what we call accrued liabilities, which include prepayments we received from our customers in Brazil in anticipation for the sales of Q3. But there has been a clear change in buyer behavior because of many factors. So prepayments didn't come in as much, so close to 0. So the prepayments did not offset this small decline in working capital. But the consequence of that is that because prepayments didn't come in Q2 that farmers will actually need to pay for the product in Q3. And so the sales in Q3 will be, as they've always been substantially higher. Just to give you a number, in the last 3 years, Brazil has sold 600,000 tonnes on average more in Q3 than in Q2. So these sales will kind of repeat this year. And the collections that are going to come from these sales are going to come mostly in Q4. So we should expect, first, some release of working capital in Q3, maybe between $100 million and $200 million, but the bulk of the $300 million to $500 million will come in the second quarter -- in the fourth quarter when the collections come in. So I would say we are still subscribed to the $300 million to $500 million release. The dynamics has changed a little bit. But -- and yes, the last point that Bruce mentioned, this one is important because the distribution business in Brazil, you buy and you sell. So the cycle is comparatively short. The production business, you produce all over the year and then you sell mostly in Q3, which means that if we were producing, we would be rebuilding inventories in production in Q3 and in Q4. But because we are mostly curtailed in Brazil, that will not happen. And so therefore, the release in the distribution business will not be partially offset by another build in the production side. So again, that's another factor that the reason why we believe the $300 million to $500 million will come. Again, maybe 1/3 of it will come in Q3 and 2/3 in Q4.

Operator: The next question will come from Chris Parkinson with Wolfe Research.

Christopher Parkinson: Got it. Can we just kind of take a step back, just given all the noise of curtailments, and I think those have been notoriously well publicized. But you said in your release that you're operating Bartow about 40%. Louisiana is entirely offline. Given the guidance of kind of production and volume sales at least for the third quarter, does that basically imply both New Wales and Riverview are somewhere in the low to mid-70s? I mean, obviously, I know there were some maintenance activity in the first half. But in terms of getting those -- both of those facilities, specifically New Wales back to an operating rate, which you'd be eventually happy with and the implications in a normalized environment. Bruce, I'd just love to hear your thoughts on kind of where we are in the third quarter, how we're progressing and how we should think about that if and when things finally normalize in terms of how you can operate your network?

Bruce Bodine: Yes, Chris, I think you're pretty spot on, on the operating rates in the mid-70s at the other facilities. So let me just go back maybe a little bit and set the stage. I think of what you're looking for -- as we came out of Q1, Q2 turnaround at New Wales, prior to the big announcements of curtailments and conserving sulfur inventory that was lower cost out of Q1 and Q2, New Wales was running at its kind of full utilization rate. So we were seeing great signs of that. Then came -- we pulled the brakes back on everything in Louisiana and kind of the Central Florida network to conserve sulfur. So we saw great signs on a sustained basis for good parts of the month following start-up out of turnaround. Riverview also had a turnaround, came up, it never really had a chance to stretch its legs at full capacity because we were already kind of sulfur curtailed, if you want to look at it that way. So we've seen good signs at all of our facilities. Now I think the last one out there was at New Wales, and we did get to stretch its legs following turnaround, and we're very encouraged by what we saw running at its full capacity target. The sulfur thing, as you pointed out, has put a constraint. We are only dealing with sulfur based on our contract volumes, which provide that full run rate that you just described, Chris, which is still a little bit down at New Wales and Riverview, 40% at Bartow and then 100% down at New Wales. So that sulfur supply -- I'm sorry, at Louisiana, that sulfur supply is what we're now constrained to and how we're trying to optimize. Now what will happen in any given week or any given month depending on what product demand there is because we don't have endless product capability at every facility. Those are the general targets that we're shooting for. But if we have higher DAP demand coming out of the international market, and we need to run Bartow a little bit more and run Riverview or New Wales a little bit less because that's where we can make more DAP for an active market, that's what we'll do. So it is a little bit messy during this constrained period of time, but we're managing to the sulfur constraint and then pairing that up to where active demand is with highest netbacks and what product mix we can make at what facility. There are a number of other factors like water balance, utilization of people around the network, et cetera, et cetera, that go into that decision. But the decision right now is not to try to run hard at any one site. It's to try to optimize for the constraint of sulfur for what the active product in whatever markets that are active and then producing that in Central Florida now because Louisiana is 100% down. I hope that answers. I know it's complicated. I wish there was an easier way to formulaically tell you something, but we'd be happy to follow up on a call if necessary.

Operator: The next question will come from Jeff Zekauskas with JPMorgan.

Jeffrey Zekauskas: It's a 2-part question. Your cash flows from operations are about $270 million year-to-date and your overall spending on CapEx loss and dividends is about $1.5 billion. So order of magnitude, will you -- maybe cash flow from operations this year can be $900 million if you hit your working capital targets or $1 billion. So are you going to be maybe about $500 million or so short of the cash outlays that you have to make? And secondly, Faustina is your lowest cost source of ammonia. Why is Faustina being closed down? Is it that you have commitments to buy ammonia and so you would have too much. What's your strategy there?

Bruce Bodine: I'm going to let -- thanks, Jeff, for sure. Let Luciano answer the first part of the question, but let me address the Faustina thing because there's some misunderstanding there. We are used -- running Faustina's ammonia plant full, and we're using that within the Florida network. So again, it becomes what a product mix issue is, how we can manage water going into hurricane season and what outlets we have at individual facilities. Louisiana has a lot of flexibility to be 100% down in that regard on fertilizer production. But no doubt, we're going to take advantage of the producer economics, ammonia and use that by shipping it across Gulf into Florida. And if we have excess, we would sell it into the market because it's quite attractive from a profitability standpoint. But the intent is not to run it, to sell it. It's -- the first intent is run the ammonia plant to utilize within the Florida network. Luciano, over to you on cash flow.

Luciano Pires: So Jeff, your numbers are -- yes, are correct, both for the cash flows from operations for the full year and for the sum of the capital expenditures with the dividend, which means, yes, we're going to be down around $500 million for the year. But most of it is passed already. So I would say our expectation is to be indebtedness kind of stable in Q3 and then go down a little bit in Q4. And of course, if this is -- goes into 2027, which we do not believe we need to pull additional levers to try to balance those things. But again, the message is, so far, we're managing for a temporary situation. And we believe not only this is unsustainable, but maybe as a follow-up to the first question on under application, whenever the bounce back comes, it will come up with a lot of pent-up demand. As much as people are talking about, for example, the need to replenish strategic oil reserves following the resolution of the conflict as much as there was a lot of revenge travel following COVID, there will be some revenge fertilizer application for years to come to support, we think, the business. So it's just a question to how to manage until we get there.

Operator: The next question will come from Ben Theurer with Barclays.

Benjamin Theurer: I wanted to dig a little bit into your outlook for the back half in Fertilizantes, just given that the purely the focus shifts towards South America. So you've mentioned in your release and in the commentary that you expect profitability to be down in the third quarter compared to the second quarter. Can you help us understand what the main drivers are behind that? Is that just associated with your own production? Is that part of the distribution business coming? Is it all of it? And then how should we conceptually think as you look into these dynamics around increased crop pricing and so on for the business in South America as we move into the fourth quarter?

Bruce Bodine: Yes, I appreciate the question there, Ben. Let me tee it up and then Luciano can get into some details on more on the EBITDA and how to think about that out of Fertilizantes. But let's start with kind of volume out of quarter 3. Quarter 3 is always kind of the peak volume quarter within the calendar year. So we expect that to be the same this year. However, historically, we see Q3 over Q2, roughly about 600,000 tonnes to 800,000 tonnes more quarter-over-quarter. And we would expect the same this year. But what's muting the full potential of what's historic is actually our production business being down. We are not making or making very little commodity fertilizers in Brazil, given the sulfur availability and affordability issue. And so that is what's driving kind of demand being down or supply to feed demand, however you want to look at it in Brazil. And Jenny addressed that being down, what, up to 20% -- 20%, 30% this year on phosphate. So that is what will give you kind of to help figure out on volume. So better than quarter 2. Typically, quarter 2 is up 600,000 tonnes to 800,000 tonnes. Obviously, our quarter 2 this year was down, but then it is constrained because we don't have our B2B production volumes to be able to sell. So with that, that already is going to handicap EBITDA. And then we're going to be more down than we were in quarter 2. And Luciano can kind of talk about how to think about how the EBITDA puts and takes work with Fertilizantes.

Luciano Pires: Yes. I would say that the goal throughout these curtailments is to make, for example, the production business stand on its own, so be kind of a 0 net contributor and how this is achieved, like the contribution margin of our animal feed sales plus a little bit of the sulfuric acid sales plus co-products should match the fixed costs and the turnaround costs. And we're actually kind of seeing Q3 even a little surplus because it's a strong quarter for coproducts as well. And a reminder, when we talk about coproducts, people usually associate, well, if I'm not producing, where are the coproducts? About half of our revenue from coproducts comes from the sale of gypsum, which we actually have a very large stockpile. So to sell gypsum for the Brazilian farmers, we don't need actually to produce. So the sales are going to be there irregardless of curtailments, gypsum only, which is about half of the co-product sales. So this is the first bucket. So the margin we make in animal feed, sulfuric acid and coproducts should pay for all of the fixed costs and turnaround costs in the production business. And then the other bucket is the distribution. So Q3 is very strong for distribution. So -- and margins are not yet where we would like it to be, but they are slowly improving. And Q3, actually, we're going to start having some contribution from Biosciences in Brazil. We expect around $30 million of sales of Biosciences only in Brazil with a kind of a margin contribution margin of around 40%. And so you start seeing maybe it's not a lot, but it's the beginning, right? $12 million of contribution from Biosciences in Brazil only. So if you add the distribution margin plus Biosciences, on the one hand, you have SG&A on the other. And so there will be a surplus in Q3, and we hope that we can maintain a kind of surplus going forward so that Brazil could keep in positive territory. Again, it's going to be hard for the Q4 because we have a less prominent quarter as usual. But for Q3, we're confident that we're going to be positive, albeit as we signaled maybe the $60 million will not be achieved in Q3.

Bruce Bodine: Now to your question about improving crop prices, that's actually some upside that maybe we're not baking in. We have seen recently, and Jenny can provide details over the last few weeks have actually returned to pretty normal buying patterns. And if that were to continue, we probably would have some upside potential in Brazil. Anything to add there, Jenny? I think I covered it. So thanks again, Ben.

Operator: The next question will come from Matt DeYoe with Bank of America.

Matthew DeYoe: I appreciate that there's a lot of uncertainty out there and just trying to get a sense, I guess, for the idle turnaround costs in the third quarter in Phosphates, right? It was $60 million in 2Q and the implied commentary was that it goes up. So I mean, order of magnitude, is $100 million the right number for the third quarter? Could it be $120 million? How do we frame that? And then guiding potash realizations to be relatively flat quarter-over-quarter, maybe like plus $10. Maybe a little bit soft of our expectations and what we've seen in the market. So is that just a function of higher freight rates driving lower netbacks to FOB. Or what else -- is that sell forward? What's going on there?

Bruce Bodine: Let me take the back half of your question, and Luciano can talk a little bit about the idle turnaround. You're spot on with freight rates, particularly on the export side. So Canpotex is definitely seeing higher freight rate. So the netback impact is there. The other thing is in the mix. So where we're seeing growth in Potash is through Canpotex. And so the contribution, it's a channel mix issue. There's more export in Q3 than what we have historically seen. We're not losing anything in North America. It's just more international growth through Canpotex that is at a lower netback and then being discounted even more because of those higher freight rates. So I think that's probably what hopefully squares the circle or circles the square for you on why there might be a disconnect. Luciano, maybe over to you on turnaround idle.

Luciano Pires: So Matt, the $60 million in Q2 is basically half and half, half idle, half turnaround. And so yes, for Q3, that idle component, it's probably going to double, right? So it's another $30 million. But the turnaround component is going to half probably. So maybe we're talking about $15 million, let's just put a bracket $10 million to $20 million additional from Q3 to Q2. But in the fourth quarter, you're going to have an additional reduction in turnaround because you're not doing turnaround on something which is either, right? So you're going to probably go back to the -- with the [ 6 ] handle in the fourth quarter. So it's not $100 million, it's not $120 million. It's well below that.

Bruce Bodine: And maybe just to highlight on that. I mean, these plants, if you take Louisiana, it's now 100% down. They are basically being put in a frozen stasis. So they're not being utilized. The planned turnaround schedules will be delayed. So CapEx that may be invested associated with a normal type turnaround is going to be deferred. That does not mean we're deferring CapEx for asset structural health. So as these assets are not running, we're still sticking to its running turnaround time schedule. But while they're down, we are taking advantage of both CapEx and turnaround costs that will be deferred until these things are back up and running and utilize that run time for turnaround. So it is, again, complicated, but this is -- we're looking very detailed at everything and taking advantage of everything we can, as we've talked about, the things we can control to wring costs out in a way that doesn't damage asset health for the long term.

Luciano Pires: By the way, we didn't have the opportunity, but the CapEx profile. So you remember, we started the year with $1.5 billion, then we got back to $1.25 billion and then now $1.2 billion. The pace at which you kind of slam the brakes matters here. So CapEx will still be in Q3 somehow around like $300 million, with a [ 3 ] handle, but then it will drop substantially in Q4. So it's another reason why Q4 should be a stronger quarter for cash flows just because that's the way you manage, right? You cannot just stop all of a sudden. So you have to manage through and then you're going to see a step change in CapEx down for Q4.

Operator: The next question will come from Edlain Rodriguez with Mizuho.

Edlain Rodriguez: Bruce, in terms of the affordability issue in phosphate, like how long can this go on? And how do you think it gets addressed? Is it crop prices moving up or phosphate prices moving down or combo? And what's your preference?

Bruce Bodine: Edlain, no, thanks. I always appreciate the question. Yes, it's impossible to know exactly. I think it's probably a combination of both. In what proportion, I don't know. I don't think that I have a preference to be quite honest, Edlain. I think in my mind, what's most certain is, as Jenny outlined, there has been up to 30 million tonnes this year of production that just won't happen, depending on how long this sulfur availability thing is prolonged. If it goes to the end of the year, the number can be up to 30 -- it could be the high end, 30 million tonnes based on our calculation. Already less phosphate applied last year, a significant reduction this year in Latin America and in the U.S., the agronomic science has not changed. So this will have an impact on yields at some point and then layer into the risk of what does El Nino do globally. So I think ag commodity prices are set to continue to rise as more evidence as crop gets removed over the course of the next 3 months, 4 months, 6 months, which is going to provide tailwinds for farmer demand. It won't take much for farmers to change the -- to feel differently about the narrative on affordability. If corn hits $5, north of $5, that is going to provide a lot of sentiment positivity. It's going to provide a lot of tailwinds. And the most -- the place that I would look first is in Brazil because the soil type just doesn't have the ability to bank nutrient value for mining it later as much as North America. But as Jenny said, in North America even, we've mined almost 2.7 million tonnes over 2 years of phosphate out of the crop removal from '25 and now '26 projection above what is average, and we aren't applying average nutrients to replenish that. So I think crop prices are going to rise. What happens with raw materials, your guess is as good as mine. But what we are in today is not sustainable. There will have to be a new economic equilibrium hit in order to not have yields on a long-term sustained basis, stay negatively impacted.

Operator: The next question will come from Kristen Owen with Oppenheimer.

Kristen Owen: I did want to ask 2 things here. First, there was a write-down in the period. Can you just articulate what that was? And then my real question just is on your inventory levels. You finished the quarter at about 125 days. Can you just help us parse out how much of that is raw versus finished goods? And how we should think about that being sort of elevated levels versus elevated prices? Just provide a little bit more color on that inventory level, please?

Bruce Bodine: No, Kristen, thank you. The write-down was a capital project that we had looked pursuing in the past, which was purified phosphoric acid and going into battery cathode material. I think we had talked about that publicly 2, 3 years ago. It became the point that we pretty much ruled out that ever being a possibility and took the write-down noncash. On the inventory, Luciano, I'll turn it over to you, maybe you got some more color on what's driving...

Luciano Pires: Yes. So Kristen, there's -- you probably looked into it. There's a footnote in our financial statements. I think it's footnote 5, which gives the breakdown of inventories in the various categories. So raw materials have been on a trend up because of prices, of course. But I would say they tend to go down now because even if you keep the same days of inventory, like you were running less facilities and especially in Brazil, where sulfur inventories are pretty much going to go down all the way to 0. The same is going to probably happen with work in progress as well. So you may remember past conference calls, we talked about an accumulation of rock inventories. And again, there was still a little bit of buildup in Q2 because, again, you stop the facilities and then you're still like processing rock and -- but structurally, these tend to go down a little bit as well. Finished goods, I would say that there's -- in terms of physical inventories, there's no different pattern for Phosphates or for Potash than we observed in the past. You remember, there was an uptick in finished good inventory for Phosphates in Q4 last year. We ended up with close to 1 million tonnes of finished goods, but now we're down to kind of 700,000 tonnes, 600,000 tonnes. This is more like a healthier level. If there's a rebound in demand, we might even go lower than that. MRO inventory, it's kind of stable, flat as well. So I'd say other than the traditional seasonality of Brazil, which will have the behavior I described earlier -- very quickly. I'd say from the physical perspective, the absolute trend for inventories is coming down. And of course, you layer on top of it the price effects.

Operator: The next question will come from Lucas Beaumont with UBS.

Lucas Beaumont: So I guess just want to get back to kind of the Phosphates volume outlook. So based on the current conditions, what you know today in terms of the pricing, input costs and sulfur and ammonia, if conditions kind of remain where they are now, what would you expect to do from a production footprint reduction standpoint as we go into the fourth quarter? Would you keep things the same in the U.S.? Would you reduce them? Or would you be able to increase it further?

Bruce Bodine: Yes. Lucas, I appreciate the question. Under your assumption, which I don't -- would say is not that disconnected from probably where we're assuming right now, production would stay the way it currently is. We would consume what we believe we have is advantaged sulfur to the competition. And we know there are enough active markets globally to be able to utilize that sulfur and constrain ourselves to that advantaged contract sulfur that we have in the active markets. And based on that, we kind of see that production volume -- listen, it may fluctuate 100,000 tonnes, 200,000 tonnes here or there, we'll see. But generally, in that ZIP code is probably a good assumption.

Operator: The next question will come from Andrew Wong with RBC.

Andrew Wong: Just have a couple here. When things do normalize and you like to get back to the regular operating rates, how quickly could that ramp up look like? Like could we -- let's say, the Strait opens up today, could you get back to regular operating rates by like September? And then my second question is on the sulfur contracts. $705 per long ton was pretty -- it was well below spot prices. Can you just kind of talk about how that came about? And let's say, if the Strait does remain closed into Q4, could you still sign another contract at the roughly similar level?

Bruce Bodine: Let me start, Andrew, with the latter part. I think it's worth talking about that we were able to create a separation on that settlement cost from what spot solid sulfur was. And I think that is a testament to the relationship that's very symbiotic that we have with the Gulf Coast producers here in the United States to be able to take their molten supply and give them a baseload that's very ratable and doesn't jeopardize their primary existence, which is to produce oil and gas, right? So that is a relationship that has worked in ways that favor us and in ways that favor them over the decades that we've had this advantaged relationship here in North America. So I can't speak to what we should expect. I think they appreciate, as we've appreciated when economics have been tough for them in the past that we are riding the edge on economics because we can't pass through that on the demand side because then we will run up against demand disruption. So we found this way to thread the needle. I think they appreciate that. They appreciate our relationship and our expectation is that, that continues to stay there. I can't guarantee what that is going to be, but I think we've proven in Q3 that we have that relationship, and we would expect to continue to see something there. How fast we can ramp back up? It's going to depend on -- well, in your scenario that magically things just return, which, by the way, they won't. It's going to take time to recover. Even if the Strait's opened up tomorrow, there's damage in refineries that are producing sulfur, what's going on in Russia and Ukraine is independent of the Strait's opening up, what's happening with Kazakhstan restrictions, that has to change as well. I mean all of those things have to happen. But if magically if sulfur were to return, we can ramp up pretty quick. As we talked about, we are making a priority to protect asset health and any of the decisions we're making about capital prioritization to do just that. Now granted, if things become protracted for even longer, that may add a little bit of time. But I'd say we're talking weeks, not months to get back to production.

Operator: The next question will come from David Symonds with BNP.

David Symonds: It's just a follow-up on Jeff's question about the realized ammonia costs in Faustina. You talked about $610 per tonne to $620 per tonne realized ammonia cost in Q3. I just want to understand, does that include the internal buying of Faustina and the kind of advantaged supply there? And if it does, I would have thought Faustina would be quite a large portion of your ammonia supply at the guided production rates of phosphates. So could we see a big drop in the ammonia realized cost in Q4?

Bruce Bodine: It does include that, and it is -- yes. So it does include that. It's just based on the other contracts that we have settled and how that's going to flow through inventory. So a good chunk, the majority of our production is either internal gas-based or gas tied contracts. We do still have some spot that's in there. But the settlement prices for our strategic contracts that are tied to market negotiation on a monthly basis, that's all included in the -- in what Luciano was talking about on how that would impact on COGS. So that does include our Louisiana tonnes.

Operator: This will conclude our question-and-answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Bruce Bodine: To conclude our call, I'd like to restate our key points. While sulfur affordability and availability are challenging for everyone in the phosphate industry, we know that the crisis will come to an end. We're taking all the necessary actions to weather the storm, cutting capital and other costs, idling facilities where necessary, redeploying capital in pursuit of higher returns and further strengthening our balance sheet, all while preserving our ability to thrive when conditions improve. So to be clear, Mosaic remains in an advantageous position with access to U.S. sulfur and open shipping channels in the Americas. In fact, our raw material advantage moves us down the cost curve at times of stress like we're feeling right now. At the same time, we're pushing to grow with incremental tonnes in potash, our very promising Mosaic Biosciences business and potential for new minerals extraction. Put simply, this is a tough time, but Mosaic is strong and resilient and better markets are ahead. So thank you, and have a great and safe day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.